Streamlined JDSU sees strong demand in telecoms
JDS Uniphase, which makes compound semiconductor chips that are used in optical communications applications, is to further reduce its manufacturing operations as it aims to become profitable.
According to company CEO Kevin Kennedy, 1350 positions will be removed from the payroll, including 850 in North America and a further 500 in China. Measures include the closure of a transceiver manufacturing operation in Florida, the sale of another facility in Ewing, NJ, and the divestiture of its cable TV business.
With further streamlining of its operations in the pipeline, the company is at last seeing strengthening demand for its components that are used in optical communications.
After launching 30 new products at the Optical Fiber Communications (OFC) conference, Kennedy said that JDSU's communications business made sales of $101.7 million in the quarter ending March 31.
That represents a 28% year-on-year increase. And with revenue in the company's other business area "“ commercial and consumer products "“ dropping sharply, the communications group was responsible for over 60% of JDSU's revenue in the recent quarter.
As recently as last year, the split between the two business groups was even.
But with the lower profit margins associated with the communications business, JDSU is planning to continue trimming its workforce and product offering.
On its total sales of $166 million in the most recent quarter, JDSU made an operating loss of $44.6 million and a net loss of $38.6 million.
The company reckons that the most recent cost-cutting measures will lead to savings of around $20 million per quarter once fully implemented.
